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Juniper gets by with a little help from its friends

Company knows it isn't Cisco, but that's no reason it can't compete, says analyst Jon Oltsik.

Unlike other tech industry chief executives, Scott Kriens of Juniper Networks is refreshingly candid and pragmatic.

Despite the fact that Juniper revenue exceeds $2 billion annually and the company's market cap is nearly $13 billion, Kriens recognizes that Juniper just can't match Cisco Systems' product depth, global sales reach, and resources. Kriens still believes that Juniper can compete by following a simple formula: 1. Pick the technical battles it can win; 2. Stay ahead of the industry on innovation and performance; and 3. Acquire and/or partner to supplement Juniper's value.

Kriens' business strategy will be in play next week with a major announcement in New York. Nevertheless, Juniper made a move this week that flew under the radar: Juniper announced an OEM (original equipment manufacturer) relationship with start-up Q1 Labs to sell its security management software under a private label. To me, this move can bolster Juniper in three ways:

• 1. Q1 competes with Cisco MARS. Unlike other security management firms, Q1 is really focused on networking and security, and concentrates on competing with Cisco's Monitoring, Analysis, and Response System (aka Cisco MARS). Juniper gains a product and partner built from the ground up to fight against its primary competitor. This should make Q1 popular with field sales very quickly.

• 2. Q1 complements the Juniper/NetScreen products. Juniper doesn't have to duke it out with Cisco everywhere; it has security customers of its own. The security line it bought from NetScreen is a perfect security device complement to Q1 monitoring, management, and reporting. Likewise, Juniper can take the NetScreen line into the Q1 base. This is one of those cliche cases where 1+1=3.

• 3. Juniper gains another enterprise hook. Security management is on fire right now as large organizations move to next-generation platforms. Yes, there are some strong competitors but Juniper/Q1 can hold its own. In the meantime, Juniper opens another door into the traditional Cisco base.

Cisco is Cisco and it will continue to win its fair share of the business regardless of what any competitor does. Still, enterprise companies are clamoring for a strong No. 2 networking vendor and Juniper realizes this. It sure looks like the company is making a series of aggressive moves, like the Q1 Labs deal, to capitalize on this opportunity.